Cuba Plans $100 Million Fund to Aid Worker-Run Businesses

July 24 (Bloomberg) -- Cuba’s communist government will set
aside $100 million to help establish private cooperatives as
President Raul Castro takes further steps to boost economic
growth on the island.

Cooperatives with as many as five employees will be allowed
to manage their own operations by the end of the year, a policy
meant to loosen restrictions on basic services and increase
productivity, Castro told the National Assembly yesterday.
Agricultural cooperatives account for about half the 200
businesses selected, Marino Murillo, deputy chairman of the
Council of Ministers, said.

“We selected a group of business organizations to run an
experiment with sufficient autonomy and power,” Castro, 81,
said, according to a transcript of the speech posted on the
government website Cuba Debate. “This experience will lift the
brake that exists on the development of productive forces.”

Since his 85-year-old brother Fidel started handing over
power in 2006, Raul Castro has initiated measures to open the
Caribbean island’s economy, including loosening of property laws
and controls prohibiting private enterprise such as taxi and
mobile phone companies.

More than 390,000 Cubans were self-employed at the end of
June, up from almost 233,000 in 2010, when the government vowed
to “redesign” the country’s economy and cut 500,000 state
workers. Transportation and food services are the largest source
of private employment, Murillo told lawmakers.

Abandoned Exploration

The latest moves may help soften the blow from Repsol SA’s
decision earlier this year to abandon oil exploration off the
island’s northern coast after a test well came up dry. Falling
prices for nickel, Cuba’s biggest export, have also undermined
growth.

Not all of Castro’s measures have aided entrepreneurs.
Earlier this month, the government announced they would impose
new taxes on imported goods in September, adding to the costs
for businesses that rely on materials from abroad.

Cuba’s economy expanded 2.1 percent in the first half of
the year, up from 1.9 percent in the same period of 2011, Castro
said yesterday.